Canadian Council of Chief Executives

Canada: Competing for China’s energy needs

sreid — Tue, 08 May 2012 14:43:45 +0000

China needs more energy to power its rapidly growing economy, but it will not wait around for Canada if our country cannot deliver, Ambassador Zhang Junsai told the Calgary Herald in an article published today. The Chinese envoy to Canada specifically mentioned a lack of infrastructure as a barrier to Canadian energy exports to Asia. He pointed out that other countries could easily supply China with the energy it needs. Venezuela, for example, is receiving significant investment from China to secure future Chinese energy supply.

Brian Emmett, an Ottawa-based consultant and former senior government official, agrees. “Our resources are large, but other countries are well-endowed, too, and many of our resources are either in remote areas or difficult and costly to extract,” Mr. Emmett writes in The Globe and Mail.

Private sector: we’re hiring

sreid — Thu, 05 Apr 2012 15:15:34 +0000

Canada’s job numbers for March showed an impressive jump, “blowing past forecasts”, as the National Post reported today. The economy gained 82,300 jobs, bringing the national unemployment rate down two-tenths of a percentage point to 7.2 per cent. Most of the new jobs are in the private sector. In fact, businesses across the country have created just under 200,000 jobs over the past 12 months, Statistics Canada reports. CCCE President and CEO John Manley spoke about the latest employment numbers in an interview with BNN’s Frances Horodelski today. Watch the interview here.

Things are looking up

sreid — Tue, 20 Mar 2012 15:34:00 +0000

Economists from several major Canadian banks raised their 2012 Canadian economic growth forecasts this week. “Some of the worst-case scenarios [on Europe, the U.S. and China] look a little less worrisome now than they did, say, in December,” said RBC chief economist Craig Wright. “The uncertainty is easing.” Wright now expects the Canadian economy to grow by 2.6 per cent this year; back in December he was predicting an increase of 2.5 per cent. High commodity prices, strong corporate balance sheets, and renewed demand from the United States for Canadian exports are among the factors that will drive growth in Canada, the forecaster says. As the economic picture brightens, business confidence is increasing. According to a recent Statistics Canada survey, Canadian businesses plan to increase their investments in construction and machinery and equipment by 6.2 per cent this year to a record $394.1 billion.

Consistency for business confidence

sreid — Fri, 24 Feb 2012 18:54:38 +0000

Current trends in corporate tax policy in British Columbia and Ontario are worrisome as they undermine productivity and job creation, writes Jack Mintz, the chair of public policy at the University of Calgary. British Columbia’s government announced this week in its budget that it will increase its corporate income tax rate from 10% to 11% in 2013-14 if the fiscal climate warrants the increase. It is widely expected that Ontario also could keep the corporate tax rate at 11.5 per cent instead of continuing to gradually lower it to 10 per cent by mid-2013 as originally planned. This uncertainty will hurt business confidence in these provinces and make them less attractive destinations for investment. “The story of the past decade is that corporate investment in machinery and structures [has] risen significantly with tax reforms and many businesses today are starting to ramp up capital spending in anticipation of a better global economy,” Mintz argues, “The best business tax strategy for Canada is stay the course — keep rates low and bases broad.”

Investing in the Canada-China relationship

sreid — Wed, 08 Feb 2012 22:25:55 +0000

Canada-China relations took an important step forward today, with the announcement that the two countries have reached agreement on an investment-protection deal. The Foreign Investment Promotion and Protection agreement (FIPA) will allow Canadian business leaders to invest with greater confidence. The deal will go into effect after reviews and legal ratifications in both countries. CCCE member Pierre Beaudoin, CEO of Bombardier, is in China with the Prime Minister this week. He said his company hasn't faced many investment issues in China but would like to see a FIPA nonetheless. "Any trade agreement that helps clarify how you would resolve a dispute is a good thing," Beaudoin said. "Right now it's not something I look to use but it could help in the future."

Evidence of export diversification

sreid — Thu, 02 Feb 2012 16:43:23 +0000

Canada’s dependence on the United States as a trading partner is declining, TD Economics reports. By 2020 the United States will account for 67 per cent of Canadian exports, down from a peak of 84 per cent in 2002. At the same time, the direct contribution of U.S.-bound exports to Canadian GDP will stabilize at 20 per cent, almost half its share 10 years ago, the bank said. A number of factors are behind this trend, including a strong Canadian dollar, the weakness of the U.S. economy, and growing foreign competition. While our trade relationship with the United States might not be what it once was, Canadian exports to China have more than doubled since 2002 and exports to Europe have increased by 83 per cent.

Canadian CEOs more bullish than their counterparts

sreid — Wed, 25 Jan 2012 15:00:14 +0000

A new Pricewaterhouse Coopers (PwC) poll suggests that Canadian companies are feeling more optimistic than their counterparts elsewhere in the developed world. Compared to business leaders in other countries, Canadian CEOs were less likely to say that their firms have suffered because of the global economic slowdown. “This doesn't mean Canadian CEOs aren't worried - two thirds are concerned about uncertain or volatile economic growth, while half are concerned about the lack of stability in capital markets,” PwC said in a summary of the findings. “Close to 50 per cent believe that the global economy will decline over the next 12 months. But Canadian CEOs may be in a better position to adjust their business strategy and operations to face whatever comes their way because of greater economic stability compared to many of their counterparts around the world.” Reflecting this more confident outlook, more than half of the Canadian executives who took part in the survey said they have increased their employee numbers in the last year, and about the same number expect to continue hiring in the coming year.

When times are tough, the tough start innovating

sreid — Thu, 19 Jan 2012 17:57:17 +0000

Uncertain economic times may be leading some companies to skimp on investing in innovation, but not in Canada, a survey of business executives in 22 countries suggests. Commissioned by GE, the second annual “Global Innovation Barometer” found that 75% of global executives are reassessing the risks of innovation and more than 60% say it has become more difficult to obtain funding for innovation. Canadian executives, however, are more optimistic about the future of innovation in this country. “Canadians share a global conviction that innovation is a key driver of economic transformation,” says Elyse Allan, President and CEO of GE Canada. At the same time, the GE study contains some important lessons for Canada. “We need to increase the speed at which innovative products are coming to market, improve the efficiency of public/private support, and tell a stronger story globally, if we want to improve productivity and drive next-generation innovation,” Allan says.

Exporting great news

sreid — Fri, 13 Jan 2012 19:15:09 +0000

The United States is Canada’s largest and most important trading partner, but the combination of a weak U.S. economy and strong Canadian dollar means that our trading relationship is not what it once was. That’s why the federal government has made it a priority to diversify our exports and to negotiate new economic partnerships with markets in Europe, Latin America and Asia. It will take time, but today’s Statistics Canada report on international trade offered some good news: in November, Canada’s exports to countries other than the United States rose 6.7%.

Occupy a higher rung on the Canadian economic ladder

sreid — Fri, 06 Jan 2012 18:48:56 +0000

One of the criticisms voiced by the so-called “occupy movement” that spread across North America and Europe last fall was that it is becoming harder and harder for disadvantaged members of society to move up the socio-economic ladder. Although recent studies appear to show that economic mobility has declined in the United States, the situation in Canada is dramatically different, the New York Times reported this week. The newspaper cited a study by economist Miles Corak of the University of Ottawa, who found that just 16 percent of Canadian men who were raised in households with the bottom tenth of incomes stayed there as adults, compared with 22 percent of Americans. Similarly, 26 percent of American men raised at the top tenth stayed there, but just 18 percent of Canadians. Corak concluded that Canada’s more robust social safety net, more progressive public policies and more equal labour markets create more opportunities in Canada for citizens to succeed. Said the Times: “In 2006 Professor Corak reviewed more than 50 studies of nine countries. He ranked Canada, Norway, Finland and Denmark as the most mobile, with the United States and Britain roughly tied at the other extreme. Sweden, Germany, and France were scattered across the middle.”